• by Joe Mandese  @mp_joemandese, August 3, 2004

The fastest-growing sector of ad-supported media isn't cable TV, or even the Internet. It's cinema advertising. According to just-released estimates from Veronis Suhler Stevenson's 2004 Communications Industry Forecast & Report, ads on U.S. movie screens grew at a compound annual rate of 38.4 percent over the past five years, and are projected to grow at a rate of 23.0 percent over the next five years, giving cinema advertising nearly double the projected growth rate of the online advertising marketplace.

While it's still a relatively small share of total U.S. ad spending, the cinema ad market is still the youngest of the measured ad-supported media sectors, and is projected to double in size from about $470 million in 2004 to more than 1 billion in 2008.

"Because the medium is still in its infancy, growth potential remains strong, especially as more digital movie screens become available," notes the VSS report. In fact, much of cinema advertising's rapid growth rate has been attributed to the rollout of digital screens.

Cinema advertising should also enjoy some organic growth from increased movie attendance. VSS projects that the number of hours U.S. consumers spend attending movies each year will rise 7.0 percent over the next five years.

The market is also ramping up as a result of a collaboration between the major movie theater chain owners, who have banded together to fund new audience research from Nielsen Entertainment that is yielding TV-like ratings for the cinema advertising marketplace, enabling planners to evaluate cinema advertising impressions alongside those of other established media.